The Airline that Doesn’t Fly Anywhere

July 18, 2017

The business of commercial airlines is to fly people around the world. That should go without saying. But just in case, some stats: JetBlue runs nearly 1,000 flights per day. Delta and its affiliates operate more than 5,000. American Airlines? More than 6,500.

Yet there’s one airline — one you probably have never heard of — that breaks this mold. It’s called US Global Airways. It’s been in operation for nearly 30 years, but it doesn’t operate any flights — ever. And it never has.

In the spring of 1989, revolutions against communism broke out in central and eastern Europe as the Soviet Union seemed open toward reform. The warming of the Soviets toward capitalism meant opportunity — and some American businessmen and women found ways to enter what would likely be an emerging market. One of those men was an immigrant from Latvia named Igor Dmitrowsky. That summer, Dmitrowsky founded Baltia Airlines, a start-up carrier offering flights from New York City to both Leningrad (now Saint Petersburg) and the Latvian capital of Riga.

But again, this was 1989, and one couldn’t simply open up an airline serving the U.S. to U.S.S.R market. That would require a lot of government approvals and that took some time — two years, in fact. In 1991, Baltia had permission to operate. And that made them a valuable company. As the New York Times reported at the time, most American commercial providers of the day didn’t have those rights.

And yet, Baltia wasn’t able to do anything, at least not right away; as the Times explained at the time, Baltia had “no planes, no flight crews and no financing.” You can’t operate an airline without that kind of stuff, obviously. That was the bad news. The good news: given its license to fly to the Soviet Union, finding money shouldn’t have been a problem.

But then, something went wrong: the Soviet Union collapsed. Baltia had to reset, taking a different approach to the changing world — a reset which cost them another five years. In 1996, Baltia was finally able to get the right to fly to Saint Petersburg — but again, the airline didn’t have any airplanes. Finally, in 1998, they had the funding to acquire an old 747; a year later, they had enough cash on hand to hire flight crews, secure gate access at New York’s JFK airport and all the other stuff you need to make a plane safely go up and come back down. It looked like they may finally make it to the friendly skies.

They didn’t.

As the Financial Times explains, “the US Department of Transportation, wary of underfunded airlines selling tickets, requires carriers to have at least a quarter of their first year’s operating expenses on hand before taking to the air.” Baltia was, well, way short on that. A failed attempt to raise funding landed its already old plane permanently — it idled in a hangar in Michigan for the rest of the decade and into the next until it was eventually retired. Along the way, the U.S. Department of Transportation revoked Baltia’s route licenses.

And yet, Baltia continued on. By 2007, they were back in business, but only so to speak; more accurately, they were back in this odd, elongated holding pattern. The company spent the previous six years as an over-the-counter stock — it’s still listed today, if you’re interested — and regained the right to fly to Saint Petersburg. Two years later, it managed to raise enough money for a new plane — just one without an engine (yes, really) — and things were looking up, pardon the pun. (They even had a comically optimistic frequent flier program for a while.) But shortly thereafter, the Securities and Exchange Commission began looking into the company. Raising money for an airline without the authorization to fly and without a plane (and then with one without an engine) is going to provoke questions, after all — and the SEC had a lot of them. This set the company back even further, especially when one exec earned himself a $1 million fine for brokering Baltia shares without authorization.

It was a comedy of errors, with potentially more to come — because despite never taking flight, the airline also won’t give up.

Last year, Baltia rebranded as US Global Airways and shifted operations from JFK to Stewart International Airport — a much smaller airport near Albany, New York. The new goal of the renamed company is, per Forbes, to provide service from the region to Tel Aviv and Paris by March of 2018. That requires new planes, which they plan to lease instead of purchase; raising $50 million in funding; and getting the Federal Aviation Administration to grant it carrier certification (which it never has).

Either way, the airline is destined for history. If it succeeds, it will be the airline which took nearly 30 years to take to the skies; if it fails, it’ll be the 30-year-old airline that never took off. (They’re aiming for #1, but #2 feels a lot more likely.)

Bonus fact: As the communist hold on the Soviet Union waned, so did the censorship of the media. That allowed for some odd hoaxes. In the spring of 1991, Leningrad Television aired a segment in which Sergey Kuryokhin, a musician, pretended to be a historian and told viewers that Vladimir Lenin had a habit of taking psychedelic mushrooms. Lenin shroomed so often, Kuryokhin claimed, that Lenin “eventually became a mushroom himself ” per Wikipedia. Enough people fell for the ruse that the Soviet government put out a statement denying that Lenin could have been a mushroom because “a mammal cannot be a plant.” (Mushrooms, of course, are fungi, not plants, but no one ever accused Lenin of being a fun guy.)

From the Archives: Where the Bags Go: What happens to your bags when the airline (a real airline) loses them.

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